Jaguar Owner Tata’s Stock Poised for Breakout, Charts Suggest
Shares of Tata Motors are set to move sharply, according to signals from one of the most widely used technical indicators.
(Bloomberg) -- Shares of Tata Motors Ltd. are set to move sharply after about a month with no real direction, according to signals from one of the most widely used technical indicators.
A study using the Bollinger BandWidth shows a so-called coiling pattern that in the past heralded a period of heightened volatility. The coil -- the shrinking gap between the upper and lower bands -- is the tightest in 15 months, and the stock moved an average 30% in the seven instances since the Covid-induced crash of March 2020 when the bandwidth was similarly narrow.
India’s second-largest automaker has advanced 184% this year as investors bet that its trimmed down costs, new model offerings and improved leverage ratios will boost shares. The company also holds more than 70% of the country’s nascent electric-car market, attracting investments from TPG and others.
The firm is betting on the electric shift even as one of Asia’s most-polluted nations has fallen behind other countries with battery models accounting for just 1% of annual sales. Tata Motors will invest about $2 billion over five years in its electric vehicle unit, Chief Financial Officer P.B. Balaji said in October, and the firm aims for 20% of total sales to be electric by 2026, with plans to roll out 10 battery models by that date.
Tata Motors was trading up 2.7% at 519.2 rupees a share as of 11:51 a.m. in Mumbai Tuesday, while the benchmark index was down 0.3%.
©2021 Bloomberg L.P.